In this episode, economist Bryan Caplan argues that the main reason getting a college degree is valuable is because of signaling (i.e., it proves that you have traits that employers value, like conscientiousness and conformity), and not because college teaches you useful knowledge or skills. Julia proposes several potential challenges to Bryan's argument, and they discuss why it matters how much of education's value is signaling.

Reader Comments (15)

Interesting conversation! Julia made a whole series of points probing Bryan's argument, and he had basically no answer for almost all of them. (Julia: "What's the strongest argument from the people who disagree with you?" Bryan: "Everyone who disagrees with me is stupid." Julia: "Companies can be run sub-optimally for long periods of time." Bryan: "That's physically impossible. Now, buy my book about how universities are run sub-optimally for long periods of time." And on and on!)

Was that what you took away from the conversation? After listening, that doesn't strike me as a very accurate description. In fact Julia admits that she finds herself closer to Caplan's position than that of economists who specialize in education and labor economics, assuming Caplan's estimates are accurate.

Right, I think she has a nuanced take on it, agreeing with the argument that signaling is important (and maybe much more important than many scholars currently believe) while being open to different interpretations and models that could explain the data differently. She gave Brian opportunities to bolster his argument/model versus alternative explanations, and I think he was largely unable to do so.

That was my take, anyway. You're right, she didn't disagree with the basic thrust of his argument.

Many interesting points here. I though Bryan unfortunately dodged many of the important questions Julia raised. Also, on the incomes of philosophy majors: in his book, Bryan uses data from a lumped category "Religion and Philosophy." People in religion departments are different from philosophy majors and, when you distinguish between them, philosophy majors do have a high income (higher than any other humanities, at least).

Not all education is created equal. Would you go to a doctor who didn't finish medical school, or a lawyer who didn't finish law school, if it were legal to practice medicine or law without a license? Would you hire a statistician who hasn't studied statistics? It's industries like sales and HR that hire all sorts of people, including philosophy majors.

College students may learn things that they'll never use at work, but they're still exploring what topics will interest them. They don't know where they'll end up working yet.

But is education just for finding a job? General education classes like History of Western Civilization make you a better person, not necessarily a better worker. If people can graduate college and still fall for fake news or medical quackery or political radicalism, then that's a failure of general education.

No self respecting philosopher who has ever read Hume of Locke would confuse correlation and causation. Wow. Both you should steer clear of talking about philosophy because you clearly have no clue about the subject.

I thought Bryan contradicted himself even more strongly than Dave suggests. His premise that education's value is 80% signaling seems to imply that many jobs or industries could do just as well with fewer educational requirements (unless, by chance, every job needs the 20% true educational value, in which case he gives no suggestion as to how to deliver just that portion). But in the last section, he dismisses Julia's suggestion that hiring could be dramatically misaligned, saying that if it were way off some companies would dominate by hiring cheaper lower-educated but equally qualified workers, and since this doesn't happen, Julia's proposal must not be true. But if signaling is not valuable to the firm in the end, his own case seems to require many hiring practices to be misaligned in the same way he dismisses. Am I missing something?

Caplan's argument paints the workforce with too broad a brush. Sure, earning a certain degree can say a lot about your character, but I agree with Max's statement about the inequality of industries. With a bachelor's degree in chemistry you could easily identify useful knowledge or skills learned, (e.g. performing a titration, calculating molarity of a solution) which would absolutely be needed for an entry level job such as a lab technician. A bachelor's degree in business administration on the other hand is far less specialized and possibly more about signaling. In an entry level business job, such as sales, you'd learn much more about the industry on the job rather than in the classroom.